Call us! 1300 317 0412
×
Home / Mortgage Advanced / How to Understand Property Valuations and Appraisals

How to Understand Property Valuations and Appraisals

A real estate agent and a home buyer discussing a property's value

Did you know that property prices have climbed over 23% across Australia in the last year alone?! Just in 2022’s first quarter, $17,000 has been added to the average price of an Australian home. Many potential buyers are being priced out each day, seeing a surging property market that doesn’t want to slow down!

However, if you are already a homeowner, why not capitalise on soaring prices and see what your house is worth? Now could be the perfect time to sell your home and climb the property ladder with a new mortgage loan

Get the latest news and updates from Lendstreet

Join and subscribe to our newsletter.

Is it a good time to buy a property?

With Australia’s property prices higher than ever before, many people are quickly arranging their finance and snapping up a property! Potential homebuyers are no longer waiting to negotiate a lower price as property values constantly rise. For example, with the average Sydney property increasing by $1,100 in value EACH DAY, you can see why!

With such a fast-moving property market across the country, it can be difficult to know what steps to take first. Should you arrange your finances first, or start looking at properties to buy first? Should you get your current home valued, or do you need an appraisal? We can help you through the confusion!

If you want to sell your home or apply for a remortgage, you may be considering a property valuation or appraisal. But, what exactly is a valuation or appraisal, and why do you need one?

What are property valuations and appraisals?

Property valuations and appraisals offer homeowners and lenders an awareness of a property’s value and worth.

Perhaps you want to know how much the value of your home has increased since you bought it? Or, do you want to assess the equity in your home so you can sell up and buy something new? Maybe you want to remortgage your home?

Property valuations and appraisals are useful tools to determine the current market value of your home. You can then use those tools to make the next step in your life. Do you want to move home? Or, are you happy in your home but want to raise extra cash through remortgaging?

Whatever situation you are in, our expert brokers can assist you!

What is a property appraisal?

A property appraisal is an estimated valuation of your home. This appraisal value provides you with the approximate worth of your home, although appraisals have no legal standing.

The value of your home will realistically be the price that a potential buyer is willing to pay for it. But, appraisals give you a good starting point to begin at.

What does a property appraisal show?

Appraisals provide you with a realistic example of what sale price your property might achieve. If you are happy with your appraisal, you are then free to begin house hunting for a new home! Do you dream of moving to the coast, or is big city living more your thing?

Remember that you will need a property valuation to list your property and make serious steps towards selling and buying a new home.

Our specialist brokers can guide you through new loan options to secure the best mortgage for your financial situation. Maybe you can move towards refinancing your current property by obtaining a valuation after your appraisal? 

Our professional brokers are specialised in finding the best refinancing options tailored for your circumstances.

Who can complete a property appraisal?

Conducting a property appraisal is simple and anyone can do it!

Yourself

You can perform a property appraisal yourself by using an online tool and entering accurate information about your property. You will receive an online property valuation for appraisal purposes immediately!

Real Estate Agent

Alternatively, a local real estate agent can prepare a property appraisal for you. Real estate agents will assess recent sales data and combine this information with knowledge of the local property market. They will visit your home and provide you with an estimated property value.

You can then move forward to find a qualified valuer who will provide you with a valuation of your home.

What impacts a property appraisal?

Property appraisals take into account several factors that can impact the result:

Local area sales

Recent sales in your area impact a property appraisal. What have houses in your local area recently sold for? They will assess current local sales data of similar properties to provide a realistic picture of property worth. You should be aware of property prices and sales data yourself to judge your property’s worth.

Home features

The features of your home impact the appraisal, for example, what are the number of bedrooms and reception rooms? More rooms will mean a higher value.

Big or small?

Property size impacts what the property is worth and the overall estimate of the appraisal. The bigger your home, the higher the appraisal will value your home.

Why would you need a property appraisal?

Property appraisals are important in real estate to give you a general estimate of your property’s worth. Property data is analysed to provide you with an idea of what your valuation might be if you decide to seek the services of a valuer.

Real estate agents recommend that a homeowner seeks an appraisal before paying for an official valuation. 

We can help you with this to eliminate the pressure and find an accurate appraisal figure. An appraisal will indicate whether it is worth seeking an official valuation and paying the valuer fee.

For example, if the appraisal produces a lower valuation than you expected, you may decide not to pay for an official property valuation.

You can use online property valuation tools quickly and easily to complete an appraisal yourself. Simply input your property details and let the calculator tell you your property’s estimated value!

Alternatively, your real estate agent can provide you with a free appraisal.

What is a property valuation?

A property valuation is a detailed report that provides an accurate valuation of the property’s worth. This formal valuation must be carried out by a fully trained and fully qualified valuer, with the valuation possessing legal standing.

What does a property valuation show?

The valuation shows an exact valuation of the property at that moment in time. The valuation may be different at a later date, particularly in a rapid housing market like Australia’s.

Mortgage lenders will need a property valuation before agreeing to any finance options. Your local mortgage broker can guide you from step to step to achieve the best results for your circumstances.

Finding a mortgage or refinancing can be complicated, particularly in Australia’s booming property market. Let us make the process simple for you!

Who can complete a property valuation?

Unlike a property appraisal, you must be a qualified valuer to complete a property valuation.

Qualified Valuer

On average, a property valuation fee falls between $300 to $600, depending on the valuer you choose. This valuation fee will also depend on the location of your property and the distance the valuer must travel to get there.

However, the valuer offering the cheapest valuation fee may not necessarily be the best option to choose. Look at local reviews for different property valuers in your area and assess the accuracy of their past valuations. 

You have the power to choose the best valuer for your property valuation, so do your research!

Your local broker professionals can help you choose the best valuer for your local area who thoroughly understands the location.

Using the services of a valuer who is unfamiliar with the local location may result in an unrealistic valuation of the property. Do they truly know your local area and market trends, or are they making general assumptions used across Australia? You need to achieve a great price for your home, whether you are looking to sell or looking to refinance.

What impacts a property valuation?

Property valuations can be impacted by various factors that the property valuer must consider:

Market trends

Market trends allow the real estate agent to assess the current market trends and occurrences in the Sydney market. They can predict the potential trajectory of the local property market and predict the continuing trends. 

Location

The property’s location is an important measure of the market value at present. Your property valuation will benefit if your property is in a popular area for families, or an area of regeneration, for example. Furthermore, local council zoning will impact the valuation. Zoning laws may limit or prevent some usage of the property.

Local area

Local area information is vital in attaining an estimate of property valuation. The real estate agent will look for information concerning the property location, as well as area demographics. What is the reputation of the area? Is it a desirable place to live?

Home features

The features of your home will be evaluated closely. Has your home been modernised recently? Or will the potential buyers need to do a lot of work inside and outside the property? Any major work will reduce the valuation of the property. This is because potential buyers will factor those renovation costs into what they are willing to pay for the house.

Accessibility

Property accessibility is important. Can you access the property easily? Are there any barriers to accessing the property? Do any adaptations need to be made to increase accessibility? Some accessibility issues may depend on potential buyers, although an inaccessible home may limit your home’s appeal.

Condition and damage

Is there any damage to the property? Is it ready for potential buyers to move into, or is it a perfect investment property? The market value of your property will certainly be affected by your property’s condition. If the property has holes in the ceilings or needs a completely new roof, the valuation will be affected. Such costs to repair the damage will need to be considered by the valuer and potential buyers.

Heritage status

Does the property have any heritage status? Some properties may enjoy an increased valuation due to heritage status as they may be desirable places to live. 

However, heritage status may repel some buyers. They may not be allowed to extend or renovate the property in the way they would like to and so may not buy it.

Parties interested in the pre-purchase stage of visiting your property may show concern in this area. Will the property’s heritage status prevent them from making repairs and alterations?

Why would you need a property valuation?

Typically, a homeowner will need a property valuation to officially list their home with their real estate agent. Alternatively, if you want to remortgage your home to release cash, an up-to-date valuation may be requested. Some lenders won’t ask for a valuation, however.

Contact your local mortgage broker so we can find your perfect lender for your refinance. We will advise you whether a lender needs a valuation of the property before you pay a valuer’s fee! Why waste money paying a fee if a lender does not require a valuation for refinancing? 

Let us help you save money!

You may also need an official property valuation in relation to valuing a deceased estate. How much is the deceased’s property worth? Or, perhaps there is a dispute resolution in place that needs to be resolved? Property valuations can be the first step to resolving the dispute.

Are mortgage brokers better than banks?

A bank or lender will let you know how much money they can lend you. That’s it! They won’t advise you about the best lenders or give you any property or budgeting advice. An expert broker is with you every step of the way, from your very first enquiry through to completion.

Offering a vast range of tools and advice, we can help to start your journey into Sydney’s property market. Our mortgage broker experts will guide you through your finance options and help you secure your next home.

We are Australian credit licensed experts and are skilled in all areas of brokering.

Get the latest news and updates from Lendstreet

Join and subscribe to our newsletter.

FAQs

Can I get a valuation on my property?

Yes! Use an online calculator to determine an estimated value of your property and receive a property appraisal. If you like what you see, a qualified valuer can provide you with a formal property valuation.

We offer many different online property valuation and finance tools on our website, so take a look today! Do you want to find out buying and selling costs, stamp duty calculations, or determine your borrowing power? Or do you want to use our planners to plan your budget, expenses, and deposit? 

Do I have to get my house revalued before remortgaging?

Not necessarily. Some lenders will only ask for an estimated value of the property before remortgaging. This can confuse homeowners who think that they need a full valuation as a matter of course. They will then pay the valuer fee and arrange a valuation, only to find out they didn’t need one!

Our expert mortgage brokers will provide specialist guidance to simplify remortgaging. We will find a range of lenders to suit your personal situation and meet your expectations. We will then advise you whether the lender needs a full valuation or a free appraisal for your remortgage application.

How much does a property valuation cost?

A formal property valuation by a qualified valuer will cost between $300 and $600. Prices will vary depending on your location.

Search for local reviews to assess a valuer’s reputation and their past experiences with homeowners. Has a valuer ever missed their valuation appointment, inconveniencing the homeowner? Or, has a valuer offered an unrealistic valuation for a property, impacting the success of the property sale?

Contact your mortgage broker professionals for free advice today!

Share this on
Join Lendstreet Mailing List
Get the latest news and updates from Lendstreet!
Join our growing community and get our latest articles delivered to you straight when they get published!
By signing up, you read and understood our Privacy Policy and Terms of Service.
[class^="wpforms-"]
[class^="wpforms-"]